Paid daily ‘fantasy sports’ operators claim they can legally operate as an unregulated house, but none of their arguments square with existing Texas law. Simply put, it is prohibited gambling in Texas if you bet on the performance of a participant in a sporting event and the house takes a cut.

Paxton went on to point out that in Texas, the traditional line between games of skill and games of chance is a little blurrier than in other states. In the Lone Star State, a game only requires partial chance to qualify as gambling and DFS more than meets that standard.

Not surprisingly, the very busy legal team at DraftKings sees the situation in a different light. In their own statement to the press they said DFS is perfectly legal in Texas, no matter what the AG says:

he Texas Legislature has expressly authorized games of skill, and daily fantasy sports are a game of skill. The Attorney General’s prediction is predicated on a fundamental misunderstanding of DFS.

There is, however, another twist in this story that could keep things interesting. According to the Dallas Morning News, Texas Lottery officials had been negotiating with DraftKings to come up with some sort of DFS-based lottery over the past year. While that deal never came to pass, it certainly will provide legal ammunition for DFS lawyers.

With Texas out of the picture for the time being and at least six other states banning DFS outright, just about one in four Americans are not able to legally play DFS.